October 27, 2005

 

CBOT Soy Outlook on Thursday: Seen mixed, leaning down on fundamentals

  

 

Soybean futures at the Chicago Board of Trade are seen starting Thursday's session with a mixed tone, but bearish underlying fundamentals are expected to limit upside potential, traders said.

 

Analysts call soybeans to open 1 cent higher to 1 cent per bushel lower.

 

In overnight electronic trade, November soybeans were 1/4 cent higher at US$5.71 3/4 a bushel, January soybeans were unchanged at US$5.83 1/2, December soymeal was unchanged at US$169.30 and December soyoil was 7 points lower at 23.46 cents per pound.

 

The market was prepared to see some support after Wednesday's declines, but with large nearby supplies, outlooks for larger crop estimates and heavier deliveries expected, there should be pressure on prices, said Don Roose, president U.S. Commodities in West Des Moines Iowa.

 

Weekly export sales and crush data at the low end of estimates coupled with growing concerns over the spread of bird flu in Asia and Europe are seen adding to the defensive undercurrent in futures.

 

Market bulls are relegated to look for South American weather problems, but conditions in Brazil continue to improve, added Roose.

 

Nevertheless, seasonal buying patterns may provide mild support to limit losses, with traders expecting technical factors to remain features in choppy, range bound action.

 

Technical analyst Jim Wyckoff said first resistance for November soybeans is seen at US$5.78 1/2 - Wednesday's high - and then at US$5.82 - this week's high. First support is seen at US$5.70 and then at US$5.66 1/2.

 

Meanwhile, the U.S. Department of Agriculture said Thursday that 2005-06 marketing year sales totaled 842,000 tonnes, with the primary buyer China at 347,200 tonnes. Pre-report estimates ranged from 800,000 to 1,000,000 tonnes.

 

Net old/new crop soymeal sales were 194,500 tonnes, a figure above estimates that ranged from 100,000 to 150,000 tonnes. Net sales of 6,300 tonnes were reported for soyoil. Trade guesses called for commitments in a range of 2,000 to 10,000 tonnes.

 

The U.S. Census Bureau's crush report said 133.2 million bushels were crushed in September, slightly below the average trade estimates of 133.7 million bushels. Soyoil stocks were seen at 1.690 billion pounds, slightly above estimates of 1.635 billion pounds and soymeal stocks were 171,600 short tonnes, under trade estimates of 284,500 tonnes.

 

In overseas markets, soybean futures on the Dalian Commodity Exchange settled mostly lower Thursday, following Wednesday's fall in Chicago Board of Trade soybeans. The benchmark May 2006 contract fell RMB3 to settle at RMB2,742 a metric tonne, after trading between RMB2,727 and RMB2,751/tonne.

 

Crude palm oil futures on the Bursa Malaysia Derivatives ended higher Thursday, boosted by expectations of a reduction in India's import taxes and short-covering ahead of holidays in the coming week. The benchmark January CPO contract ended at MYR1,435 a metric tonne, up MYR17 from Wednesday.

 

Rotterdam soybeans and soymeal prices were lower, European vegoils were mixed.